Innovative Approach Approved by Top Banking Institution for Cryptocurrency Risk Disclosure Framework

The Basel Committee on Banking Supervision announced yesterday (Wednesday) that the organization has confirmed the approval of the final disclosure framework, which includes a set of standardized forms and templates for banks to report their crypto asset exposures.
Appropriate Disclosure Framework
The organization held meetings on July 2nd and 3rd to discuss various policy and regulatory incentives, ultimately determining this decision. The framework will be published later this month and will take effect from January 1st, 2026.
At the July meeting, the #BaselCommittee approved the disclosure framework for banks’ crypto asset exposures and agreed to targeted revisions to its crypto asset standard #BaselIII.
The disclosure framework was initially proposed in December 2022 and opened for comments in May 2023. It includes a series of targeted amendments to the original proposal and revisions to the prudential standards for holding stablecoins.
The official announcement stated: “These revisions aim to further promote a consistent understanding of the standard, especially regarding the criteria for stablecoins to obtain the preferential ‘Group 1b’ regulatory treatment. The updated standards will be published later this month, with an implementation date of January 1st, 2026.”
Since 2019, the committee has been assessing banks’ exposures to cryptocurrencies. In 2021, the company suggested classifying cryptocurrencies as high-risk Category 2 assets, assigning them a 1250% risk weight. This would require banks to hold capital equivalent to the value of their crypto asset exposures. Additionally, Group 2 holdings will be limited to less than 1% of the value of their Group 1 holdings.
Stablecoins have been given a new 1b designation, exempting them from additional requirements beyond Group 1 assets. However, stablecoins with “ineffective stabilization mechanisms” have been categorized into Group 2. The proposed restrictive measures received a lukewarm response from the industry.
Assessing Risks
The organization members further discussed the prudential implications of banks acting as potential issuers of tokenized deposits and stablecoins. The scale and stability of such products depend to some extent on their specific structure and the judicial legal regulations.
The announcement added: “Based on current market developments, the Basel framework broadly covers these risks.” “The committee will continue to monitor this area as well as other developments in the crypto asset market.”
Meanwhile, the European Union recently implemented the Markets in Crypto-Assets Regulation (MiCA) for stablecoin issuers. Therefore, stablecoin issuers will need to follow both MiCA and the Basel Committee when they come into effect.